XOMA. Bull or Bear? Message Board

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Biotech / Medical : XOMA. Bull or Bear?

XOMA 32.48

+0.7%

Nov 14 9:30 AM EST

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To: Robert K. who wrote (7257)	9/19/1998 12:12:00 PM
From: aknahow	Read Replies (2) of 17367

Bob, you sometimes comment on the overall market. While it is difficult for me to know if my following comments are self serving I think bioteck stocks are in a great position almost regardless of what happens to the rest of the market. Consolidation in many industries occurs when share price have been beaten down to exceptionally low levels. Rio Tinto Zinc management had some interesting comments on this regarding Australian mineral companies. Amber Oil in Canada is getting a buyout bid at a premium to market of over 50%. Neither minerals nor energy appear set for a quick rebound and yet some of the companies are targets. The biotech industry is an intellectual property industry and not a commodity one so a rebound does not depend at all on an increased demand due to an economic pick up. Aside from the uncertainty factor Asia, Russia and Latin America have little to do with prospects for biotechs. But the fact that makes me most convinced that this is the place to be is DuPonts stated intentions to redeploy billions into drugs and biotechs, Mercks cash hoard for partnerships and now Chirons receipt of over a billion from Bayer. While I expect these funds will mainly flow to larger companies with earnings or at least sales the events produced by announcements of the deals should generated interest in the entire sector. It seems the move to biotechs has already begun even though I would say it began with crop genetic companies. Dow has picked up the rest of Mycogen and almost all the seed companies have been spoken for. Montsanto, once a supposed target of DuPont, has been grabbed by AHP. Could be wrong but with all the cash designated for investment, the current deals already done and the desperation of existing companies to find financing should mean more buyouts and mergers in the not so distant future. All opinion, and not implying that any of this will help XOMA.

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